Strategy's perpetual preferred securities, STRC, recently fell below their $100 par value, briefly dipping to $97.11 before closing near $98.57. As Bitcoin retreated to around $73,000, the market began to reassess the company's fundraising capabilities and cash reserves.

STRC falls below par value

Historically, STRCs have typically faced downward pressure during periods of Bitcoin weakness, and price declines are also common around ex-dividend dates. The ex-dividend date brings about a mechanical price adjustment, while a drop in Bitcoin often diminishes investor interest in strategy-related securities; the combination of these two factors leads to more pronounced short-term volatility.

This decline also raises a more immediate question: if the STRC remains below $100 for an extended period, Strategy's efficiency in raising funds through ATM-based issuance of such securities may decrease.

Cash decreased after debt repurchase

Strategy previously repurchased approximately $1.5 billion of its zero-coupon convertible bonds maturing in 2029. This move reduced its overall debt burden, but the funds came from the company's dollar cash reserves.

Following the repurchase, the company's cash balance decreased from approximately $2.25 billion to $871 million. Based on the current annual preferred stock dividend obligation of approximately $1.7 billion, this cash will only cover about 6 months, whereas the company initially set the target for this reserve to cover about 24 months.

• Convertible bond repurchase size: US$1.5 billion
• Cash reserves: approximately US$871 million
• Annual preferred stock dividend obligation: approximately US$1.7 billion

The market is more sensitive to subsequent financing.

Strategy Executive Chairman Michael Saylor previously mentioned that the company could meet its dividend payout and support its balance sheet in several ways, including selling Bitcoin, issuing new shares when MSTR's share price is high relative to its net asset value, or continuing to issue STRC financing.

The report noted that management's core metric for evaluating these actions remains the increase in value per Bitcoin. However, with declining cash reserves, investors are clearly more sensitive to the feasibility of these financing options.

Strive products remain around face value

Unlike Strategy, another Bitcoin treasury firm, Strive Asset Management, recently launched its perpetual preferred security, SATA, which has remained relatively stable around its face value of $100 over the past two weeks. This price performance has been relatively stable even during periods of Bitcoin weakness.

SATA currently offers a dividend yield of approximately 13%. Strive has also announced plans to introduce a daily dividend payment mechanism. Although this arrangement has not yet been formally implemented, the market may already be viewing it as one of the factors supporting price stability.

In addition, Strive has cleared all the debt it assumed following the acquisition of Semler Scientific. In contrast, Strategy recently reduced leverage through debt buybacks, but its cash buffer has also shrunk, leading the market to focus more on its future financing costs and dividend pressures.